MACRO Graphs and Vocab

Gross Domestic Product (GDP)

The total monetary value of all final goods and services produced within a country's borders in a specific time period.

Inflation Rate

The percentage increase in the price level of goods and services over a period, typically measured annually.

Unemployment Rate

The percentage of the labor force that is unemployed and actively seeking employment.

Aggregate Demand (AD)

The total quantity of goods and services demanded across all levels of the economy at a given overall price level and in a given time period.

Aggregate Supply (AS)

The total supply of goods and services that firms in an economy plan to sell during a specific time period.

Business Cycle

The fluctuations in economic activity that an economy experiences over time, typically measured by changes in GDP.

Fiscal Policy

The use of government spending and tax policies to influence economic conditions, including demand, employment, and inflation.

Monetary Policy

The actions of a central bank or regulatory committee that determine the size and rate of growth of the money supply.

Consumer Price Index (CPI)

An index measuring the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

Interest Rate

The amount charged by lenders to borrowers for the use of money, expressed as a percentage of the principal.

Balance of Trade

The difference between a country's exports and imports of goods and services, a component of the balance of payments.

Long-Run Aggregate Supply (LRAS)

The total quantity of goods and services that an economy can produce when utilizing all resources efficiently.

Short-Run Aggregate Supply (SRAS)

The total quantity of goods and services that producers in an economy are willing to supply at a given overall price level in the short run.

Phillips Curve

A graphical representation showing the inverse relationship between the rate of inflation and the rate of unemployment.

Supply and Demand Graph

A graphical representation of the relationship between the quantity of a good that producers are willing to sell and the quantity that consumers are willing to buy.

Liquidity Preference Theory

Theory that describes the demand for money as the preference for holding cash rather than investing it.

Exchange Rate

The price of one currency in terms of another currency, affecting international trade and investment.

Monopolistic Competition

A market structure characterized by many firms selling products that are similar but not identical, allowing firms to set prices.

Aggregate Supply (AS)

The total supply of goods and services that firms in an economy plan to sell during a specific time period.

Business Cycle

The fluctuations in economic activity that an economy experiences over time, typically measured by changes in GDP.

Fiscal Policy

The use of government spending and tax policies to influence economic conditions, including demand, employment, and inflation.

Monetary Policy

The actions of a central bank or regulatory committee that determine the size and rate of growth of the money supply.

Consumer Price Index (CPI)

An index measuring the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

Interest Rate

The amount charged by lenders to borrowers for the use of money, expressed as a percentage of the principal.

Balance of Trade

The difference between a country's exports and imports of goods and services, a component of the balance of payments.

Long-Run Aggregate Supply (LRAS)

The total quantity of goods and services that an economy can produce when utilizing all resources efficiently.

Short-Run Aggregate Supply (SRAS)

The total quantity of goods and services that producers in an economy are willing to supply at a given overall price level in the short run.

Phillips Curve

A graphical representation showing the inverse relationship between the rate of inflation and the rate of unemployment.

Supply and Demand Graph

A graphical representation of the relationship between the quantity of a good that producers are willing to sell and the quantity that consumers are willing to buy.

Liquidity Preference Theory

Theory that describes the demand for money as the preference for holding cash rather than investing it.

Exchange Rate

The price of one currency in terms of another currency, affecting international trade and investment.

Monopolistic Competition

A market structure characterized by many firms selling products that are similar but not identical, allowing firms to set prices.

Lorenz Curve

A graphical representation of income or wealth distribution within a population, illustrating the proportion of the total income earned by cumulative percentages of the population.